Court Validates Seabridge Gold’s Work Status on Stalled KSM Project

Seabridge Gold (TSX:SEA,NYSE:SA) has secured a favorable but conditional ruling from the BC Supreme Court regarding the development status of its long-stalled KSM project.

The court has upheld the BC Environmental Assessment Office’s (EAO) determination that Seabridge had “substantially started” the US$6.34 billion project prior to a July 2024 deadline.

This threshold was required to preserve the project’s environmental certificates.

However, the ruling also identifies procedural shortfalls, finding that the EAO failed to adequately consult with the Tsetsaut Skii km Lax Ha (TSKLH) First Nation. Consequently, the court mandated a 90 day window for the TSKLH to submit written comments on the project’s development status. Following this period, the EAO is required to formally reconsider its “substantially started” ruling based on the new submissions.

The court also dismissed a separate challenge to the EAO’s determination filed by the SkeenaWild Conservation Trust.

“We are satisfied that the Court has confirmed the reasonableness of the EAO determination,” Seabridge Chair and CEO Rudi Fronk said. “We will continue to execute our work plans for KSM and look forward to meeting with the EAO to receive an update on their additional consultation activities in due course.”

KSM secured provincial and federal environmental approvals in 2014, but is as yet unbuilt. It hosts proven and probable reserves of 2.29 billion metric tons containing 47.3 million ounces of gold and 7.3 billion pounds of copper.

In May, the BC government indefinitely postponed a decision on permit amendments required for KSM’s Mitchell Treaty tunnels because a 12.5 kilometer section of the proposed route crosses mineral claims held by Tudor Gold (TSXV:TUD,OTCPL:TDRRF). The province has directed the companies to resolve the land-use conflict before proceeding.

Despite setbacks at KSM, Seabridge continues to sink capital into the site’s physical infrastructure.

The company reported it has incurred US$150 million in expenditures on permanent works since filing its application for “substantially started” status in January 2024, pushing total project outlays to approximately US$864 million.

Seabridge plans to spend an additional US$136 million this year while employing roughly 400 people.

The company has also indicated that site work will continue uninterrupted during the 90 day consultation period and the subsequent EAO reconsideration process.

Shares of Seabridge were trading at C$39.50 by 11:45 a.m. EDT on Tuesday (June 9).

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.